Korea Credit Guarantee Fund to Issue 543.2 Billion KRW P-CBO in October for COVID-19 Affected Companies

Priority Support for SMEs and Mid-sized Companies Facing Financing Difficulties Due to Bond Market Instability

Interest Rate Benefits Provided to 134 Companies, Over Three Times More Than Same Period Last Year, Until October This Year

[Asia Economy Reporter Shim Nayoung] The Korea Credit Guarantee Fund (Chairman Choi Wonmok) announced on the 27th that it will issue P-CBOs (bond collateralized securities issued using bonds of low-credit companies as collateral) worth 543.2 billion KRW this month to facilitate smooth financing for companies affected by COVID-19 and others.

This issuance primarily focused on small and medium-sized enterprises (SMEs) and mid-sized companies that have relatively faced difficulties in financing due to recent bond market instability, weakened investor sentiment, and liquidity crunch. The support targets include 18 mid-sized companies and 321 SMEs, with support amounts of 318.5 billion KRW in new funds and 224.7 billion KRW for refinancing existing corporate bonds.

Considering the increased cost burden on companies due to rising interest rates, the Korea Credit Guarantee Fund provided interest rate reduction benefits to a total of 134 promising companies through October this year. This figure is more than three times higher compared to 44 companies in the same period last year. This increase is due to the Fund expanding the scope of interest rate preferential treatment to include companies with excellent ESG management capabilities and others.

The Korea Credit Guarantee Fund’s P-CBO guarantee system supports companies in raising funds directly from the financial market by issuing securitized securities based on corporate bonds issued by individual companies as underlying assets. One advantage during periods of rising interest rates is the ability to secure long-term funds at fixed interest rates.

A representative from the Fund stated, “In line with government measures to stabilize the bond market, we plan to closely consult with authorities going forward.”

This content was produced with the assistance of AI translation services.